Law firms facing uncertainty

This year’s survey shows continued improvement in trading conditions and many firms enjoying increased revenues and profits again in 2016.

  • 64% of respondent firms (84% of the top 20) are showing an increase in revenues and one in two of those firms enjoying an increase in excess of 10%.
  • Profits increased in 57% of firms surveyed which is down from 64% of respondents in 2015 (62% of the top 20 firms also down from 73% in 2015).
  • Almost half of these firms (44%) saw profits grow by more than 10% (this applies for 34% of the top 20 firms) this year.
  • This is contrasted by 11% of firms surveyed and 15% of the top 20 firms seeing a decrease in profits in the last 12 months.

Maintaining profitability continues to be one of the main challenges for the sector with increasing fee pressures and continuing pay and operating cost increases. Increases in operating costs were reported primarily in the larger firms (46%), in Dublin firms (38%) and less so in firms outside Dublin (19%). Salary pressures, additional staff numbers and property costs are the primary drivers of these increases. Marketing and IT spend have increased and are running each at c. 5% of turnover for most firms. 

These numbers help to explain why almost two in three firms stated that the outlook for their firm improved in 2016 and were confident about the outlook for their firm in 2017.

The data was drawn from a survey of 107 practices in September and October, conducted by Amárach Research.

Download the report here.